The Government Accountability Office provided an update of its study of real estate appraisal issues as mandated by the Dodd-Frank financial regulatory reform bill. The GAO is conducting a year-long study of appraiser independence. As required by the Dodd-Frank legislation, the GAO must study the effectiveness and impact of options for selecting appraisers, different valuation methods and the effectiveness of the Home Valuation Code of Conduct.
The GAO’s study will focus on appraisals of one- to four-unit residential properties to answer four broad questions:
How often are different options for selecting appraisers and valuation methods used?
What are the potential advantages and disadvantages of these options and methods, and how do policies, including HVCC, affect their use?
To what extent do valuation costs and disclosures to consumers vary by appraiser selection option and valuation method, and how has HVCC affected these costs and disclosures?
How do federal and lender policies, including HVCC, address conflicts of interest in the valuation process, and how have these policies affected industry stakeholders?
At this point, the GAO study is still in its preliminary stages. For example, it is in the process of “evaluating potential data sources, analyzing federal policies and academic and industry research, and interviewing federal agency officials and appraisal industry stakeholders.” Stay tuned.
The update can be found at www.gao.gov/products/GAO-11-158R